Broadband cancellation fees 'punish' customers

Published by Rob Goodman on 01 August 2014. Last updated on 01 August 2014

Broadband customers unhappy with their internet provider because of poor service are paying hundreds of pounds in cancellation fees, an investigation by Citizens Advice has found.

The charity found that the average cost of getting out of a broadband contract early was £195 on average between January and June, with some reported fees as high as £625.

In some cases, these fees are being passed to debt collectors, as customers try to move to a better service and refuse to pay the "arbitrary cancellation fee".

Sources of complaints to Citizens Advice over the past 12 months included slow connection speeds, persistent faults and bad customer service. One in five (23%) complaints were about cancellations, 18% were to do with how complaints were handled and 15% were concerning billing or payment issues.

In total, more than half of complaints reported were about sub-standard service.

As a result of its findings, Citizens Advice is calling on internet providers to never issue cancellation fees if customers are having persistent problems with their service, forcing them to stay tied to unsatisfactory contracts.

It also warned that providers need to be a lot more careful when handing over unpaid cancellation fees to debt collection agencies.

Held captive

Gillian Guy, chief executive of Citizens Advice, said: "People are finding themselves held captive by bad broadband services. Some consumers who have stood up to problem suppliers have found themselves being punished for switching when they've been hit with a cancellation fee that is then passed over to a debt collection agency.

"Internet service providers must not shackle customers seeking a better service with unreasonable fees that can turn into shock debt. All internet users need to be able to easily have a way out of inadequate contracts and broadband speeds that only give them daily frustration."